My FOREX (Foreign Exchange) trading mentor, investor and entrepreneur Jason Graystone talks a lot about treating trading as a business. I totally agree. When you manage 28 of the world’s major currency pairs as I do, each one has it’s own personality and characteristics. Only when you start to understand this concept, will you be able to have an edge in the markets.
Trading as a business means thinking of your currency pairs like employees
- Some will perform better than others
- Some will take holidays
- Some will perform better on their own and some will perform in ‘teams’
- Some will have unpredictable personalities
- And, well some you will have to get rid of – through redundencies
Only through thorough testing and analysis can you determine which currency pairs are worth keeping.
Trading as a business
The other thing to note around this topic is the costs of doing business. Trading as a business will require you to invest time in the markets. Some currency pairs will be profitable and some will cost you money. Depending on the timeframes you trade, the brokers spread will be larger on some pairs than others. If you’re scalping the markets or trading on the lower timeframes continually, monitor how much you are paying your broker for the privilege versus profits coming out of the markets.
Always take time to understand the portfolio you are trading. Have weekly, quarterly and annual reviews to understand past and current performance. You may be surprised at the outcome.
If this article has been useful, or if you would like to know more about currency trading, my style of trading or business as a whole then please get in-touch. If I can help you, i will.
Thanks for reading, and good luck in the markets traders.